When you initially buy a home, you are thrilled with achieving a new state of adulthood. You understand your mortgage documents and asked good questions to make sure you understood how to make your payments. However, mortgage scams are a major problem in modern times. You need to know the basics of avoiding mortgage scams or you’ll quickly find yourself in trouble.
Who do You Call?
In the first year of your mortgage, your mortgage will be sold from one lender to another in quick succession which leads to mortgage scams immediately. The quick change of owners can get incredibly confusing. You need to know who “owns” your mortgage at any given time; basically, who are you supposed to pay. If you don’t know, ASK!!! Call the most recent company that you think owns your mortgage and ask if they do in fact own it. I myself had a late payment once when my mortgage was sold between 3 different banks in a single month and I was too afraid to ask.
Most importantly, you need to know a good customer service contact number for each mortgage provider. There will always be a customer service phone number. Unfortunately, you cannot prevent your mortgage being sold so this confusion is something you will have to accept.
Spotting a Scam
When it comes to spotting a scam, trust your gut and use your best judgement. Mortgage scams will frequently look real. They will use logos that look almost identical to your actual mortgage company, with slightly different fonts or colors. They will make offers that seem too good to be true, offers of lower rates for no reason or offers to partially forgive your mortgage risk free. You will also get numerous offers to pay your mortgage when you die or notices of default.
Sure signs of mortgage scams are simple to recognize. If letters say a matter is urgent or you have defaulted for no reason, it’s probably a scam. A letter asking to change your payment or pay unusual fees or charges should always be followed by a phone call to a trusted customer service line. No real mortgage lender will tell you to do something without calling a lawyer, your lender, or other industry professionals. Scammers will frequently advise you to not contact industry professionals.
Things You Don’t Do
- Don’t sign or agree anything that you don’t understand
- Don’t be afraid to ask questions of people that you trust (realtor, initial mortgage lender, experienced family members, etc)
- Don’t rely on a promise or verbal agreement. If it isn’t in writing, it didn’t happen
- Don’t sign over your home for the promise of better things
When I initially got my mortgage, I received letters and promises from companies promising me riches, lower payments, and confusion almost every day. I called my initial mortgage lender to ask if this seemed normal but also by asking my realtor who sold me the house for advice. They were quickly able to tell me if something seemed like a scam. For those reasons alone, it is important to choose professionals in the industry that you feel you can trust.
Always trust your gut when it comes to mortgage offers and questions. I promise that if you hold true, the offers will get easier to handle. It became a source of laughter when the same scam offers kept trying. I would just laugh and shred the offer…for the 10th time. After a year or two, I got almost no more offers in the mail. At least, until I sent out requests for information on refinancing, then they came back. I still shred them!